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Opinion: Enough With The Hypocrisy, Boeing

International rebuke of Boeing’s recent petition seeking a tariff on Bombardier C Series aircraft sold in the U.S.—quickly followed by a proposed 300% duty to be imposed by the U.S. Commerce Department—has been both deafening and seemingly universal. We may never know for sure whether Boeing was emboldened by the protectionist agenda in Washington. Nevertheless, the Trump administration’s shadow looms over the company’s ill-conceived initiative, which is both ...

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Canada's response to Boeing's complaint already has demonstrated the complaint is having a substantial business impact, and I fully expect additional consequences to follow in weeks to come. However, Boeing's bigger concern should be the potential damage to its brand and reputation. On the other hand, management simply may not care, given the company's scale. So much for strategic thinking.

True, as long as we lean more towards public financing of large high value/high risk projects justified by the social benefits over profits.

Would the USA's Commerce Dept have lowered its proposed fine on Bombardier had the government(s) of Canada fully measured and advertised the benefits to USA workers? Maybe Canadians would or should protest such an egregious act pouring their tax monies into their southern neighbor.

Now, Airbus may ship large CSeries sections down to Mobile assembling them alongside their own A320's, and we know that plant's sole purpose is to make us think these planes are "Made in USA" justified by social benefits to Alabama!

This latest action is a rerun of American protectionism which has a long history of, If you cannot beat them ban them, for example; On 20 October 1961 Braniff International Airways in the United States ordered six BAC. One-Elevens. Mohawk Airlines sent representatives to Europe seeking out a new aircraft to bring them into the jet era, and on 24 July 1962 concluded an agreement for four One-Elevens, and. Braniff subsequently doubled their order to 12, Bonanza Air Lines also ordered three One-Elevens in 1962 but was stopped by the U.S. Civil Aeronautics Board (CAB), who claimed that subsidies would be needed to operate a jet on Bonanza's routes, an action which was claimed by some at the time to be protectionism. The CAB also stopped Frontier Airlines and Ozark Air Lines from ordering One-Elevens, although allowing Ozark to order the similar Douglas DC-9 and Frontier to order Boeing 727-100s. The CAB had also unsuccessfully tried to block the Mohawk's order. Later of course we had the Concorde saga.

I suspect the LAWYER approach has already been pushed by Boeing to Embraer. Embraer, another highly subsidized company (take into account the military side and it's even worse), it fighting BBD at the WTO. Thankfully for everyone involved, military contracts are not considered subsidies. This is why Canada should not buy military planes from anyone else but start to build its own, give those fat contracts to BBD and that wouldn't be called a subsidy. At that point, we'll truly have a "level playing field". And Dassault already proposed to build the Rafale in Canada and even share all IP, design, code. I think it's time for Canada to think "Canada first" too [no choice but to FOLLOW the trend to survive]. And play with the same stupid rules (WTO doesn't consider fat military contracts are subsidies). Or we could truly sit down and get rid of that stupid WTO rule and compare apples with apples. Then the subsidy story becomes totally different. I hope we get there. For all of us taxpayers in Canada, USA, Europe and Brazil. Our tax money should go back to the people, not to subsidize airplanes to foreign companies, for tax breaks on airplane manufacturers and the like. Veterans, seniors and the sick should get back their own tax money. Not huge military industrial conglomerates.

OK agreed that this move makes little sense on the surface. What I'd like to know is does Boeing face similar 'protectionist' scenarios when trying to sell aircraft in foreign markets? Is it easier for a french, canadian or german based airline to buy Boeing or Airbus aircraft? Does Airbus get heavy government subsidies or not? Can truly fair/free trade exist in this or any other industry, or is it likely that each player involved will seek advantages that will benefit its bottom line?

In this case, if we take Canada. The Canadian CSeries is blocked from the US market. At the same time, Both AirCanada and WestJet are taking deliveries of the new 737MAX. Canada lets its airlines chose what planes they need for their flight segments. And, interestingly enough, AirCanada bought both the 737MAX and the CSeries. Some will say that AirCanada is buying Canadian for national pride. But that's not the case, they bought Embraer in the past (over Bombardier CRJ) because that's what they needed. So much for that argument. If anyone wants to argue that the Cseries and 737Max are in the same category (like Boeing claims at the USITC), they should look at carries that fly BOTH. CSeries is for long thin routes (open new routes). And is perfect on short hauls as well (can do multiple types of flights per day, look at how AirBaltic uses their CSeries). Max is when you need more seats. Each has its role. So, no, when it comes to Canada, we don't block anything from Boeing, we let the free market decide. Even if Boeing is FOUR TIMES more subsidized than Bombardier (60% vs 15%). And even now that Boeing and the US gov are out to kill our aerospace industry, the Canadian market is still open to the 737. If it were only up to me, I'd knee-jerk so quickly that there would be a 600% tariff on 737s. But my gov understands that it's in the interest of our airlines to have access to all the tools that they need. Instead, we can purchase our military stuff somewhere else and drive a point that way. Finally, you have a good point with your question "will the aerospace industry ever be subsidy-free". I think the answer is "no" because countries like China will do whatever pleases them and Boeing will never try to fight someone bigger than them. They prefer punching the little neighbour that just got a cute new bicycle... We will all play this "pretend" game that there are no subsidies and that Canada is the most bad boy of them all, being 16% subsidized (yeah right Boeing).

If Boeing is 4 times more subsided than Bombardier's aircraft industries, the ugliness of U.S. double standards is sickening, and I think, to an extent that the rest of the free world will find means over time, to level out. The resulting war of trade, will make NONE of us first ...

If US actually goes ahead with this, it will allow everyone else impose tariffs to suit their own political agenda.

In all aviation deals, there is an element of politics. As mentioned in the article, all parties have been guilty of some part of these "strange tactics" of getting financial assistance from government organizations.

Therefore, if someone wants to push for Airbus or for Boeing to get the order, a new tariff could be imposed citing some subsidies infringement (the current tit-for-tat of Boeing vs Airbus at the WTO is providing more than enough fuel).

The risk everyone sees, is that rather than trying to make the industry more fair, it has done the very opposite.

Another great point. Nobody thinks of the consequences or, when they do, say that it's not "up to them". The USITC doesn't care about consequences. They're kinda "just the cop" that applies the rules. It that makes it unfair to US airlines? Don't care. If that ends up costing more jobs to the US economy? Don't care. I'm serious, the will just apply the rules. And also, they will decide the facts that suits them. For example, they chose the 100-150 seat category with a (2900?) nm range to target the CSeries. But now the ERJ fits in the same category. Yet in the USITC paperwork, they DO NOT mention the ERJ as a 100-150 seat plane with that same range. Can you read between the lines? They "forgot" to include the ERJ!!! The latest ERJ numbers puts them SQUARE in that category. But it's inconvenient to include the ERJ in there. There's only BBD, BA and AB in that category...

And yes, the future is scary with all these "half baked" decisions and policies. Yes, good luck telling China to not block something from the west. They will have so many examples to reply back "look who's talking".

And t's not just this case. Look at drone strikes. If ever some other power becomes the "police officer" of the world and decides to fly drones over our heads and decides to take out "bad apples" and accidently hit a school and kill 50 kids, we will have zero moral leadership to say "unfair". The precedent is already there. Many times over. If this happens, we will have to sit idle while the rest of the world watches some reality show and couldn't care less about that.

We are building "precedents" and our leadership doesn't realize that this will come back to haunt us. I see we, as a Canadian because, up to now, we were kinda the 51st state so tightly integrated. But maybe it's a good thing that Trump wants to build walls (even economic ones), maybe we won't be guilty by association and China will spare our schools. I, personally don't like where this is headed and if NAFTA falls, I will see a silver lining in that. Even though that will kill my job for sure. At least we'll still have our souls.

We've lived in a land of power and plenty for so long that we think we're immune to karma. We've even built whole religions around that fantasy.

But if the 19th Century was "The British Century" -- and the 20th Century was "The American Century" -- the 21st Century will quite obviously be "The Chinese Century" -- and they've ALREADY got us outnumbered 4-to-1.

Now that Boeing, and other moral degenerates, have eagerly sold all of OUR technology to the Chinese -- and greedy Amercan consumers have over-bought cheap Chinese stuff, to live beyond our means, without fully paying our bills, until we owe them all our future wealth, and have made them the legal owners of America's future -- they aren't gonna need us much longer -- except...

1.) As a land to plunder for natural resources (as WE did with all of the Third World nations, during "our" century), and

2.) As a target (Wanna keep in power? Motivate your citizens to rally around their government, and even forfeit their liberties, by just starting a war with someone; has worked in the U.S. for generations, and the repressive Chinese Communists will find that model even more useful).

RE: "does Boeing face similar 'protectionist' scenarios when trying to sell aircraft in foreign markets? Is it easier for a french, canadian or german based airline to buy Boeing or Airbus aircraft?" For answers to this, please look at the historical, present fleet profiles as well as the present order list of Air France and Lufthansa.

Air France-KLM operates or has on order 70 B777s and 38 brand new B787
Lufthansa operates or has on order 34 B747s (including the brand new 747-8I) and 34 brand new 777-9X
Air Canada's long haul fleet is 100% Boeing. It operates or has on order 9 B767, 25 B777 and 30 B787.

Clearly, Canadian, German and French airlines do buy billions of dollars worth of equipment from Boeing. They buy the best suited aircrafts for their routes. An airline buying a less suitable aircraft based on protectionnism reasons would be at a massive disavantage against competitors: for one thing, it couldn't bargain with its supplier.

The US airline industry and its workers are being hosed in order to keep Boeing lavishly profitable with foreign orders. The govenment will eventually destroy over a million US jobs so Boeing doesn't have to compete.

Boeing sold 787s below cost to Air Canada. Apparently, Boeing thinks that's different from Bombardier offering a discount to a major and influential new customer. That's from the same geniuses at Boeing who think the C Series is a threat to 737 sales. If they don't sell a single 737 ever again, their current order backlog is 8 years, even at the recently-upped rate of 47 a month. I'd love to know what the reaction was in Boeing's Ottawa office that was trying to sell Super Hornets to Canada when the complaint was filed and again when it was upheld. I wish I had a dollar for every "WTF" uttered on those occasions.

I agree with @user-1710852 The aviation buyers can help USA to reach that goal, by not buying USA made product. So USA will be strong again with themselves. Not with the world help! This is the goal of Trump and Boeing?

Interesting points, but nearly all of them don't address the reason for the action. Inform me on the details of COGS vs. sales price. I understand that many tax incentives and the like from governments are baked into the "discounted" price that clients pay for any aircraft. That said, if governments are pouring money into a given production line, that corrupts a free and open market concept, and should be addressed as unfair trade practice.

I am sure the C series line will have various benefits for U.S. citizens, companies and fliers. That said, I don't think it's wrong to investigate if the manufacturer is gaining an unfair competitive advantage. Europe, and its love child, Airbus, has long been identified as receiving illegal subsidies by the WTO ($18+B USD). I know...Boeing has also been found to have somewhat recent suspicious subsidies that needed to be addressed (around $3B USD). No one is guiltless, here. That said, Europe has far outpaced the US in "launch subsidies" and the like, and is certainly not a sterling example to lead the pack.

Whether Boeing has skin in the game, or the U.S. will see some tangible benefits from the C series is moot. This is a dynamic, ever-changing and shifting landscape...I don't think it's wrong to investigate possible improprieties and try to rectify them. If there's no "there" there, let Bombardier continue, unfettered.

So if the REAL problem is Airbus and China then why doesn't Boeing go after THEM? We keep hearing that they are doing this as a warning shot. Boeing uses Bombardier as an example to fight China/Airbus?!? We're kinda like the Syria to fight Russia? This is a proxy war. Boeing and the gov are sleeping too often together. Logic is starting to bend.

That's an awesome argument. Kill your friends to show the bad guys how serious you are.

Then there's the argument that Bombardier will eventually kill Boeing. Seriously, Canada is a country of 37M. We are having trouble filling all the jobs for the aerospace industry as it is will our humble aerospace production. So, business jets and regional airliners, we have our hands full. Thinking that we'll build a range of planes from 50 seats to 400 seats and take out Boeing, that makes no sense. Sure, we could hurt the 737. But that would be Boeing's own making. Even at 22M, united didn't want their 737-700. The US is protecting a lazy company that stopped innovating and relies solely on engine manufacturers and glass-cockpit makes to innovate (as someone says: Boeing is mostly iterating on winglets).

They are also using the "disruptive technology" theory. But they fail to see that this is not the steel industry where mini-mills killed steel mills. This is an industry that needs a lot of money and people. And Canada simply doesn't have too much of either of those. So much for that argument. China, yes, unlimited resources in people and money. But no, oh no, don't go head to head with them. Take that baseball bat to Bombardier...

Boeing vowed "never again" (re: lease planes for 1$ a month to eastern airlines to get a foothold in the US). And they end up with an even worse situation (Airbus getting a brand new, in service, state of the art plane for ZERO dollars).

Thanks for asking. This trade dispute was back in the spotlight this week over news that the Canadian government is likely to scrap plans to buy $5 billion worth of Boeing F/A-18 E/F Super Hornets because of Boeing’s complaint about C Series subsidies. Lara Seligman has a story on that here on AviationWeek.com. We expect to publish another outside Viewpoint that reflects Boeing’s point of view on the trade dispute next week.
Joe Anselmo
Editor-in-Chief

Boeing's action is completely disappointing - and even disgusting to me. I can only imagine that Trumpism has something to do with it, along with the Boeing-Embraer connection. I have lost all respect for Boeing's directors.

Boeing and every other American aerospace company of any consequence have been the best in the business for more than a century on the strength of their technology and innovative spirit, and that is how they will prevail in the long term, not on the basis of bogus fair-trade claims.

Obviously the article was far too long for you to read or even skim it and retain anything. Try reading it again and this time, note what it says about U.S. content in the C Series and how building them in the U.S. would increase it further. Boeing does not have a competing product and has no plans to make one, so unless you think forcing U.S. airlines to buy much bigger aircraft than they need is "putting America first", then I suggest you stop jerking your knee and re-spouting a twit on Twitter and look at actual facts, however much they spoil a mindlessly-repeated slogan.

I totally agree with your article. The hypocrisy is past disappointing and approaching disgusting. But it was probably more of a strategic decision from Boeing and a valued move if you look at it from Trump tower and the MAGA world…

Before the Airbus deal, this move put a hold on any new orders. Not just in the US, but the whole world. No one will buy a new CSeries until the final decision about tariffs and Bombardier’s future is made in 2018. Even if Boeing loses the petition, it gives them more time to come up with a competing strategy to the CSeries.

The Airbus deal will re-open the order books before the 2018 decision, but it’s still a Win for MAGA folks with the hundreds of jobs that will be created in the US. Only time will tell if Boeing will be spurned by the aerospace community for this petition. But I doubt it since most companies will swallow their pride and purchase what they need – even if they have to hold their nose while doing it…

Your article is Fake News. Boeing will prevail. US Government will not let them import parts and assemble them to only then dump the planes below cost to US Carriers. Airbus bought an Egg. The C Series is a total disaster. Remember Airbus is a creature of the government. They rely on government subsidies

”The C Series is a total disaster. ” Are you sure about that? ”C Series to earn favorable reviews. The appeal: the airplane’s roomy cabin—aisles, windows and overhead bins are larger and seats are roomier than on other single-aisle passenger jets—and its state-of-the-art cockpit, reliability, lower emissions, fuel economy that meets or exceeds expectations and the fact that it is about 50% quieter than comparable aircraft.” Please do a neutral DD’s before putting stupid comments.

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